10/22. The Senate rejected a motion to invoke
cloture on S 1751,
the "Class Action Fairness Act of 2003", by a vote of 59-39. See,
Roll Call No. 403.

Senate Democrats lack the votes to defeat this bill on an ordinary
majority vote. So, they have utilized a filibuster. Filibusters can be terminated by
a cloture vote. However, cloture motions required a three fifths majority to
pass. See, Senate Rule No.
22.

This bill,
sponsored by Sen. Charles Grassley
(R-IA) (at right) and others, would reform class action procedure. The bill
states that its purposes are "(1) assure fair and prompt recoveries for
class members with legitimate claims; (2) restore the intent of the framers of
the United States Constitution by providing for Federal court consideration of
interstate cases of national importance under diversity jurisdiction; and (3)
benefit society by encouraging innovation and lowering consumer prices."

The bill would amend
28 U.S.C. § 1332,
regarding diversity jurisdiction, to provide that "The district courts shall
have original jurisdiction of any civil action in which the matter in
controversy exceeds the sum or value of $5,000,000, exclusive of interest and
costs, and is a class action in which -- (A) any member of a class of plaintiffs
is a citizen of a State different from any defendant; ..."

The bill would also increase court scrutiny of
non-cash settlements. It provides that "The court may approve a proposed
settlement under which the class members would receive noncash benefits or would
otherwise be required to expend funds in order to obtain part or all of the
proposed benefits only after a hearing to determine whether, and making a
written finding that, the settlement is fair, reasonable, and adequate for class
members."

It would also prevent geographic discrimination in payments to class members.
It provides that "The court may not approve a proposed settlement that provides
for the payment of greater sums to some class members than to others solely on
the basis that the class members to whom the greater sums are to be paid are
located in closer geographic proximity to the court."

The bill also would prohibit class counsel from paying bounties. Finally, the
bill provides for clear written notices concerning a proposed settlements.

The vote broke down substantially along parties lines, with all but one
Republican supporting the bill, and all but eight Democrats opposing the bill.

The House has already passed its version of the bill, and President Bush and
Vice President Cheney have recently given speeches in which they have supported
this legislation.

The Association of Trial Lawyers of America
(ATLA) opposes the bill. The U.S.
Chamber of Commerce supports the bill. Thomas Donohue, P/CEO
of the Chamber, stated after the vote in a
release that "This is a missed opportunity to get rid of an anchor dragging
on our economic growth ... The current system of rampant venue shopping and
abusive settlements costs every American $721 each and every year."

He added that "Based on the remarks made by a number of Senators after
today's vote, however, we do remain encouraged about the prospects for the Senate
passing class action reform this year. We intend to work quickly to try and
address the concerns raised by a number of Senators on the floor after today's
vote"

4th Circuit Rules in Cell Phone Products
Liability Case

10/22. The U.S. Court of Appeals
(4thCir) issued its unpublished
opinion
[5 pages in PDF] in Newman v. Motorola, a products liability case in which a
cell phone user alleges that his Motorola phone gave him brain cancer. The
Appeals Court affirmed the District Court's decision to exclude certain expert
testimony offered by the plaintiffs.

Christopher Newman and his wife filed a complaint in
U.S. District Court (DMd)
against Motorola and others. The District Court ruled that an expert witness for
the plaintiffs, Lennart Hardell, could not testify at trial for the purpose of
expressing an expert opinion on the issue of causation. (See, opinion at
218 F. Supp. 2d 769.)

This appeal deals only with the issue of exclusion of this expert testimony.
However, in resolving this issue, and applying Rule 702, Federal Rules of
Evidence, the Appeals Court examined, and commented upon the one expert's
research in support for the proposition that cell phones cause brain cancer. It
found it lacking.

Rule 702 provides that "If scientific, technical, or other specialized
knowledge will assist the trier of fact to understand the evidence or to
determine a fact in issue, a witness qualified as an expert by knowledge, skill,
experience, training, or education, may testify thereto in the form of an
opinion or otherwise, if (1) the testimony is based upon sufficient facts or
data, (2) the testimony is the product of reliable principles and methods, and
(3) the witness has applied the principles and methods reliably to the facts of
the case."

The Court wrote that "Federal Rule of
Evidence 702 requires a trial judge to perform a gatekeeping function with
respect to expert testimony; for such testimony to be admissible, the judge must
determine that it is both reliable and relevant." It added that "In the end, the
trial judge has ``considerable leeway´´ in making the admissibility
determination."

The Court wrote: "The district court
identified several problems with Dr. Hardell’s proffered testimony on causation,
and we mention two. Most significantly, the district court observed that Dr.
Hardell’s research fails to show that users of cellular phones face an increased
risk for developing malignant brain tumors. Although Dr. Hardell testified that
his research shows an increased risk for developing brain tumors generally, he
achieved this result only by considering the occurrence of a particular subtype
of benign tumors, specifically, benign acoustic neurinomas. The district court
questioned the relevance of research linking the use of cellular phones to the
development of acoustic neurinomas because Dr. Newman does not have an acoustic
neurinoma; he has a malignant astrocytoma."

The Court continued: "The district court also questioned
the reliability of Dr. Hardell’s research because it failed to demonstrate a
dose-response relationship, that is, it failed to show that with greater use of
cellular phones, a person faced a greater risk of developing a tumor. Showing a
dose-response relationship is, as Dr. Hardell agreed, an important factor in
establishing causation. In short, Dr. Hardell’s testimony faced problems of both
relevance and reliability, as the district court determined."

Hence, the Appeals Court concluded that the District Court did not abuse its
discretion, and affirmed.

This opinion is short, but not insignificant. The Court did not
state why it designated it as unpublished. It did write, however, that
"Unpublished opinions are not binding precedent in this circuit. See Local Rule
36(c)."

This case is Christopher Newman and Frances Newman v. Motorola, et al., U.S.
Court of Appeals for the Fourth Circuit, No. 02-2424, an appeal from the U.S. District Court
for the District of Maryland, at Baltimore, Judge Catherine Blake presiding,
D.C. No. CA-00-2609-CCB.

Rep. Otter Introduces Bill to Amend PATRIOT
Act

10/21. Rep. Butch Otter (R-ID)
introduced HR 3352,
the "Security and Freedom Ensured Act of 2003 (SAFE) Act". This bill
is similar, but not identical, to
S 1709,
also titled the SAFE Act, introduced in the Senate on October 2 by
Sen. Larry Craig (R-ID).

HR 3352 would modify several sections of the criminal code and the Foreign Intelligence
Surveillance Act (FISA) to revise changes made by the
USA PATRIOT Act. The "Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001" was passed by
the 107th Congress as
HR 3162. It became Public Law 107-56 on October 26, 2001.

The bill would amend Section 501 of the FISA. This is the section of the FISA
that provides for "Access to Certain Business Records for Foreign Intelligence
and International Terrorism Investigations".

The bill would also amend 18 U.S.C. § 3103a to limit the authority to delay
notice of search warrants, also known as "sneak and peak" warrants.

10/22. The Department of Commerce (DOC) announced
that it has picked the winners of its annual National Medals of Science and Technology.
See, DOC release for the list
of winners.

The White House press office also issued a
release that
states that "The National Medal of Technology recognizes men and women who
embody the spirit of American innovation and have advanced the nation's global
competitiveness. Their groundbreaking contributions commercialize technologies,
create jobs, improve productivity and stimulate the nation's growth and
development. This award, established by Congress in 1980, is administered by the
Department of Commerce."

This release also states that "The National Medal of Science honors
individuals in a variety of fields for pioneering scientific research that has
led to a better understanding of the world around us, as well as to the
innovations and technologies that give the United States its global economic
edge."

President Bush will award medals to the winners at a White House ceremony on
November 6.

These sorts of awards are one of the things that governments do to incent
innovation and pick winning technologies. Another approach is for
the government to
pick certain technologies that it determines ought to be developed, and provide
funding to the entities that its picks to research and develop those technologies. Yet a
third approach is to establish and maintain a government mechanism that
gives limited
property rights to all innovators, and leaves it to investors in the market to
decide what to fund, and to consumers in the market to pick winning technologies.

The Constitution provides for this third approach. It states that "The Congress
shall have the power ... To Promote the Progress of Science and useful Arts by securing
for limited Times to Authors and Inventors the exclusive right to their respective
Writings and Discoveries." It also provides that "No Title of
Nobility shall be granted by the United States."

The federal government is now involved in all three approaches listed above.

Some members of Congress are focusing on the property rights
regime. Members of the Congressional Caucus on Intellectual Property have written a
letter to House Republican and Democratic leaders asking that a vote be
scheduled on HR 1561,
the "United States Patent and Trademark Fee Modernization Act of 2003 ".(The
letter was written on October 15, and then circulated for more signatures.)

They wrote that "A well-functioning USPTO has been vital to the United
States' commercial and scientific base by providing an economic engine and
preserving the incentives for innovation as guaranteed under the U.S.
Constitution. For more than two hundred years, the agency has helped secure the
economic success of the United States by empowering inventors, such as Thomas
Edison and the Wright Brothers ..."

The letter continues that the USPTO "is severely in need of additional
resources and thus is in a true crisis." The problem derives from the situation
that the USPTO is funded by user fees, but some of these fees are diverted to
subsidize other government programs, leaving the USPTO underfunded.

President Bush, like President Clinton before him, has continued to submit
budgets to the Congress that divert user fees. Moreover, the Congress has for
over a decade passed appropriations bills that continue this diversion. The
appropriations bill for the Departments of Commerce, Justice, and State (CJS
bill) for fiscal year 2004 that the House passed in July, and the CJS bill that the
Senate Appropriations Committee passed in September, continue the diversion.

HR 1561 would change this. It would allow the USPTO to spend on its
operations all of the user fees that it collects. The IP Caucus letter warns
that if this bill is not passed, "patent pendency will increase dramatically",
"pendency
would jump to over 40 months in 2008" and "patent holders would be unable to
rely on the quality of their patents and will risk expensive and lengthy
litigation".

When Phil Bond, the Under
Secretary for the Technology Administration
(TA), and other Commerce Department officials held a briefing in February on the
Administration's FY 2004 budget proposal, Bond stated that there was a total of $123
Billion for research and development. The USPTO budget is about one one-hundredth as
large. The President's budget proposal included $1.4 Billion for the USPTO.
HR 2799,
the House CJS bill, provides for "$1,138,700,000" plus "an additional amount not
to exceed $100,000,000 from fees collected in prior fiscal years" for the USPTO.

People and Appointments

10/21. Jason Klitenic was named Deputy General Counsel for the
Department of Homeland Security. He has been
Deputy Associate Attorney General at the Department of Justice since January
2002. Before that, he was a partner in the law firm of
Alston & Bird in Atlanta, Georgia.

10/22. Sen. Susan Collins (R-ME),
Sen. Joe Lieberman (D-CT), and
Sen. Carl Levin (D-MI) sent a
letter
to Secretary of Defense Donald Rumsfeld regarding JetBlue's disclosure of
customer information. They wrote that "We are writing to seek further
information regarding why a Department of Defense contractor collected the
personal information of more than one million passengers of a commercial
airline, JetBlue Airways, and then matched that information against commercial
databases to develop passenger profiles. These actions suggest the contractor
may have violated the Privacy Act of 1974, and they raise disturbing questions
about the reliability of safeguards in place at the Defense Department to
protect Americans' privacy." See, also
story titled "EPIC Submits Privacy Complaint To FTC Regarding JetBlue", also
published in TLJ Daily E-Mail Alert No. 744, September
23, 2003.

10/22. The Federal
Communications Commission (FCC) announced that on October 20, 2003 it
adopted a
Notice of Apparent Liability for Forfeiture (NALF) that fines four radio and
TV stations for violation of the FCC's rules regarding radiofrequency radiation
limits. This NALF is FCC 03-258. The FCC stated that this proceeding involves "a
multi-user site where the power density level produced by each individual
licensee was within acceptable limits, but the cumulative effect exceeded the
limits established by the FCC." The FCC imposed a fine (proposed forefeiture) of
$10,000 for each station. See, FCC
release [PDF].

TIME? Joseph
Liu (Boston College of Law) will give a lecture titled "Rationalizing
Trademark Defenses". This is a part of
Georgetown University Law Center's (GULC)
Colloquium on Intellectual Property & Technology Law Series. For more information,
contact
Julie Cohen at 202 662-9871. Location: GULC, 600 New Jersey Ave., NW.

Deadline to submit reply comments to the
Federal Communications Commission (FCC) regarding its notice of proposed
rulemaking (NPRM) pertaining to its rules governing the provision of air
ground telecommunications services on commercial airplanes in order to enhance
the options available to the public. The FCC adopted this NPRM on April 17,
2003, and released it on April 28, 2003. This is WT Docket No. 03-103. See,
notice in the Federal Register, July 25, 2003, Vol. 68, No. 143, at Pages
44003 - 44011.

Deadline to submit requests to the Internal
Revenue Service (IRS) to speak at its October 23, 2003 hearing regarding
its notice of proposed rulemaking (NPRM) regarding computation and allocation
of the credit for increasing research activities for members of a controlled
group of corporations or a group of trades or businesses under common control.
The rules implement the research and development tax credit codified at
26 U.S.C. § 41.
See,
notice in the Federal Register, July 29, 2003, Vol. 68, No. 145, at Pages
44499 - 44506.

12:00 NOON. Deadline to submit comments to the
Office of the U.S. Trade Representative (USTR)
regarding countries that deny adequate and effective protection of
intellectual property rights or deny fair and equitable market access to U.S.
persons who rely on intellectual property protection. Section 182 of the Trade
Act of 1974 requires the USTR to prepare a report. Section 182, which is
codified at 19
U.S.C. § 2242, is also referred to as "Special 301". This is an out of
cycle review. The USTR announced that this review will focus on Korea.
However, it added that "Additional countries may also be reviewed as a result
of the comments received pursuant to this notice, or as warranted by events."
See,
notice in the Federal Register, October 3, 2003, Vol. 68, No. 192, at Page
57503.

RESCHEDULED FOR OCTOBER 28.2:00 PM. The House
Ways and Means Committee will meet to mark up
HR 2896,
the "American Jobs Creation Act of 2003". This bill would, among other
things, replace the FSC & ETI tax regimes that the WTO held to be
illegal export subsidies. Location: Room 1100, Longworth Building.

5:30 - 7:30 PM. The American
Enterprise Institute (AEI) will
host a book forum. Charles Murray will discuss his book (due for release on
October 21) titled Human Accomplishment : The Pursuit of Excellence in the
Arts and Sciences, 800 B.C. to 1950. See,
Amazon page. See also,
AEI notice. Location: AEI, Twelfth floor, 1150 17th St., NW.

Deadline to submit written comments to the
Internal Revenue Service (IRS) regarding its notice of proposed rulemaking
(NPRM) regarding computation and allocation of the credit for increasing
research activities for members of a controlled group of corporations or a
group of trades or businesses under common control. The rules implement the
research and development tax credit codified at
26 U.S.C. § 41.
See,
notice in the Federal Register, July 29, 2003, Vol. 68, No. 145, at Pages
44499 - 44506.

Tuesday, October 28

9:00 AM. The House
Ways and Means Committee will meet to mark up
HR 2896,
the "American Jobs Creation Act of 2003". This bill would, among other
things, replace the FSC & ETI tax regimes that the WTO held to be
illegal export subsidies. Location: Room 1100, Longworth Building. This mark
up was previously scheduled for Monday, October 27.

12:00 NOON. The Cato
Institute will host a book forum. Charles Murray will discuss his book (due for
release on October 21) titled Human Accomplishment : The Pursuit of Excellence
in the Arts and Sciences, 800 B.C. to 1950. See,
Amazon page. See also,
AEI notice.
Press contact: Veronique Rodman at 202
862-4871 or vrodman@aei.org. Lunch will
follow the program. Location: Cato, 1000 Massachusetts Ave., NW.

Deadline to submit comments to the Office
of Management and Budget (OMB) regarding its proposal "to issue new guidance
to realize the benefits of meaningful peer review of the most important
science disseminated by the federal government regarding regulatory topics."
See, OMB
document [14 pages in PDF] titled "Peer Review and Information Quality".

10:00 AM - 12:00 NOON. The
Department of
State's (DOS) Advisory Committee on International Communications and
Information Policy (ACICIP) will meet. Ambassador
David Gross, U.S.
Coordinator for International Communications and Information Policy, is
scheduled to attend. The agenda includes "communications policy issues, future
directions of the Committee's work, discussion regarding countries of
particular interest to the ACICIP, preparations for the World Summit on the
Information Society, and consultation regarding the most important emerging
technologies". See,
notice in the Federal Register, October 10, 2003, Vol. 68, No. 197, at
Page 58744. Location: Room 1107, Harry S. Truman Building, 2201 C Street, NW.

The Cato Institute will host a conference
titled "Telecom and Broadband Policy: After the Market Meltdown".

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